12
Complying with the Law

Learning Objectives

By the end of this chapter, you should be able to:

• Recognize the need to be aware of and comply with laws regulating the call center profession.

• Identify agencies that regulate the call center profession.

• Describe some of the key laws and regulations pertinent to customer contact or call centers.

It will not injure you to know enough of law to keep out of it.

Old Farmers Almanac (1851)

THE NEED FOR REGULATIONS

As with any industry, the call center profession has many rules and guidelines that are in place to better regulate and direct it. In many cases these rules are preemptive, in that they were passed or established in advance of problem areas. In other cases, they are reactive as a result of past abuses by people in the profession. In either case, the goal of the laws and regulations that exist related to call centers is to set ground rules for ethical and fair business practices and to assist consumers and businesses. They also exist to reduce or prevent future abuses by those less scrupulous employees and organizations and to punish those who do not adhere to established guidelines.

More organizations are investing in technology-based marketing and sales in an effort to capture a growing worldwide population of technology savvy consumers. As you read in Chapter 1, projections are that by 2010 as much as 70 percent of the U.S. population alone will own a cellular telephone and 94 percent will have telephones. Couple this with projections from a landmark 1999 Internet Demographics Study conducted by CommerceNet and Nielsen Media Research, which estimated that the U.S. Internet population is projected to rise from the 1995 level of 10 percent to 75 percent in 2005. From a global perspective, in 2000, 74 percent of Internet users were in North America and Western Europe. By 2005, the number is expected to shift to 60 percent of the Internet users residing outside of North America. Those are huge numbers and opportunities for making money for organizations.

Unfortunately, along with the explosion of technology and associated new ways of conducting business has come a barrage of frauds, scams, and unscrupulous activities by many companies and individuals. These irresponsible and, in some cases, intentional criminal acts cost consumers and organizations billions of dollars a year. The incentive for such people and organizations is based on the fact that more and more consumers are purchasing via the telephone, through the mail, and over the Internet.

A review of some statistics on the Website for the National Association of Attorneys General reveals that according to the American Association for Retired Persons (AARP) there are an estimated 14,000 fraudulent telemarketing operations calling thousands of American consumers daily. Compound that with all the fraudulent pieces of mail that the U.S. Postal Service estimates is delivered along with its yearly distribution of 180 billion pieces of mail and you see why consumers are concerned about certain types of business services associated with some call centers.

For these reasons the federal and state governments have stepped in to regulate how business should and can be done via technology and the mail.

REGULATING ENTITIES

The primary entities for regulation of industries that use telephones, prerecorded messages, facsimile machines, Internet, and the U.S. mail for marketing and trade are the Federal Trade Commission (FTC), the Federal Communication Commission (FCC), and the United States Postal Service. Each agency has specific regulations related to telemarketing, sales and advertising. There are also various state regulations that must be followed.

REGULATORY GUIDELINES

In addition to various state and local regulations, there are numerous federal laws and rules that focus on common customer contact center or telemarketing operations (e.g., solicitation, advertising, sales, marketing). While your organization should have policies and procedures in place for compliance with these laws, as a call center professional, you should also be aware of them and their basic tenets:

Federal Communication Commission’s 900–Number Rule

Some organizations are involved in providing information and services for a fee via an advertised 900 number that a customer calls. Once connected, the customer is typically billed either a flat rate or a per minute charge. If charges are greater than 2 dollars, the outgoing message heard when the customer connects must contain a description of the service provider, briefly describe the service and state the costs for the service or information. After this announcement, customers must be given three seconds to hang up before charges begin. There are additional requirements under the FCC guidelines with which you must comply if you are in an organization providing such services.

Federal Trade Commission’s Mail or Telephone Merchandise Trade Regulation Rule

Telemarketers sometimes refer to this as the 30-day Rule because it requires shipment of a product advertised and ordered via mail or telephone within thirty days. Basically, the rule requires that when advertising merchandise through the mail or telephone (including fax) you must have a reasonable basis for delivering or expecting the product will be shipped within a certain time frame. If no policy exists for reasonable delivery within your organization, the law requires shipment within thirty days. If you later determine that you cannot make the thirty day shipment, you must notify the customer and request permission to delay or give him or her the option of cancellation. In the latter case a refund must be automatically generated to the customer.

Federal Trade Commission’s Telemarketing Sales Rule

As required by the Telemarketing and Consumer Fraud and Abuse Prevention Act, the FTC issued rules governing certain telemarketing activities. While the rules are quite detailed, you should be aware of several specific restrictions if you are involved in outbound or inbound sales call centers. Companies that violate this law are subject to a $10,000 fine, per incident. Under the Rule, it is a deceptive and illegal telemarketing practice if it includes:

• Failure to disclose required information. Specifically, before a customer pays for a product or service, you must inform him or her about the total costs to purchase, receive, and use the product or service. You must also describe any restrictions or conditions related to the purchase, and policies for refunds, cancellations, or exchanges.

• Misrepresentation of any aspect related to the purchase of a product or service. All the elements of disclosure required in the last paragraph must be clearly stated with no intent to deceive a customer.

• Obtaining or submission for payment of a check, draft, or other negotiable paper without the customer’s consent. Before any negotiable instrument can be submitted for payment against a customer’s checking, savings, or similar account, you must obtain express written authorization or a tape-recorded oral authorization from the customer. Otherwise, you must send a written confirmation of the transaction to the customer before a payment instrument is submitted for payment.

• False or misleading statements to induce someone to pay for goods or services. You must be sure that any information provided to a customer is accurate. If unsure, verify it before telling your customers.

Other tenets of the Telemarketing Sales Rule restrict the use of threatening, intimidating, obscene or profane language, requesting payment of any type to remove negative credit information or improve credit history, harassing anyone by making numerous calls (whether the calls connect or just ring before hanging up), or calling someone who has previously asked that they not be contacted.

Additionally, the Rule prohibits you from calling a person’s residence other than between the hours of 8 A.M. and 9 P.M. local time and require that you disclose promptly and in a clear, conspicuous manner the following information to the person receiving the call:

• You name/identity

• That the purpose of the call is to sell goods or services

• The nature of the goods and services

Like most laws and rules, there are numerous exceptions depending on what products and services that your organization provides. Check with your supervisor or team leader for clarification of the ones that apply to you.

The Telephone Consumer Protection Act of 1991 (TCPA)

This law directed the Federal Communication Commission (FCC) to adopt regulations that would provide consumer protection against undesired telephone and facsimile solicitations. Further the law restricted the manner in which organizations can use autodialers (predictive dialing systems) unsolicited facsimile advertising, and prerecorded or artificial voice (computer generated) messages. Certain groups (e.g., government agencies, tax-exempt nonprofit, polling, or political organizations) have some flexibility in their use of the latter as long as they follow specific guidelines. Additionally, an organization with a preexisting established business relationship (as defined in the law) or with prior express consent can make such calls. Anyone using an autodialer to transmit prerecorded or artificial voice messages (even to call businesses) must clearly state the business name and business phone number or address at the beginning and end of a prerecorded message.

Also prohibited under the FCC rules is the practice of placing solicitation calls to a consumer’s home before 8 A.M. or after 9 P.M. (local time).

Consumers have a variety of ways to complain about unsolicited calls and ultimately protect themselves against future calls. They can contact the Direct Marketing Association (DMA) Telephone Preference Service that publishes a list of consumers not desiring unsolicited calls. Consumers can also contact the Federal Communication Commission, The Federal Trade Commission, and their state consumer protection office or similar entity. Additionally, consumers can refer fraudulent telephone solicitations to the Federal Bureau of Investigation (FBI) or the State Attorney General’s Office.

With some exceptions, the FCC rules under TCPA do not apply to calls placed to business numbers, however, there may be individual state laws to prohibit such action.

As in any industry or profession, call center professionals must adhere to specific governmental laws and guidelines as well as to organizational policies and procedures. This is especially true in an industry in which customers and organizations regularly conduct business through a variety or traditional means (e.g., telephone, facsimile and U.S. mail) as well as through e-mail, over the Internet, and with developing technology.

Unfortunately, along with access to new methods of delivering products and services, come unscrupulous activities by those who prey on unsuspecting or uninformed consumers. To protect such people, there are local, state, and federal laws and rules, which make certain activities illegal. These rules are implemented and enforced by such agencies as the Federal Trade Commission, Federal Communication Commissions, United States Postal Service, Federal Bureau of Investigation, and the office of the State Attorney General. Additionally, consumers can request assistance from annoying or unsolicited telemarketing calls by contacting the Direct Marketing Association.

Some of the more prominent laws and guidelines that protect consumers include the Federal Communication Commission’s 900-Number Rule, the Federal Trade Commission’s Mail and Telephone Merchandise Trade Regulation Rule, Telemarketing Sales Rule, and the Telephone Consumer Protection Act of 1991.